Spikes Through the Trend Line

Just a quick question…

Looking at the EUR/USD chart at the moment there’s a nice clean downchannel extending from Jan 5th right through to today, EXCEPT for that upwards spike to 1.3018 occasioned by the BOE rate hike.

Would you guys continue viewing this as a down channel even though it has been broken on this one occasion? Does the spike through downchannel resistance negate it in any way?

You get my drift lol.


Generally…the trend will continue after the news…but not always

A spike is exactly that… a spike! What I mean is that unless you see further confirmation that there is a break in the trendline (i.e. a good solid CLOSE above/beneath it) then you should still consider the trendline to be in tact. Spikes are usually just quick over reactions to a certain event. Hope that helps.